K-Swiss eyes key endorser to drive business

K-Swiss is looking to make a splash with a major tennis
endorsement, having already made a run at Andy Murray and continuing to talk
with Novak Djokovic, whose contract with Adidas expires at the end of this
year.

The company, whose revenue fell 33 percent to $340 million
from the end of 2005 to the close of last year, is switching gears and wants to
add a signature endorser to drive its performance business. That sector
accounts for just 16 percent of K-Swiss’ sneaker sales; 83 percent comes from
the lifestyle category that has been the company’s focus, with the balance from
other categories.

“We are looking for a brand changer, one that will move the
needle,” said Erik Vervloet, K-Swiss director of sports marketing. “We went
down the road with Murray, and our pursuit of him proves our brand is serious.”

Several tennis agents and sneaker executives agreed that they
had never seen K-Swiss so serious about signing top players.

Tommy Haas is on the roster of K-Swiss
endorsers, but the company wants a mega-star.

Murray, the No. 3-ranked player in the world, will command at
least $5 million annually when his deal with Fred Perry expires later this
year. He is expected to sign with Adidas, sources said, though no deal has been
struck.

Terms for a deal with a Djokovic, the world’s No. 4-ranked
player, could be far different. Djokovic is from Serbia, a smaller global
market than Murray’s Great Britain. In addition, Djokovic’s image has taken a
hit over the last year for his comments at the 2008 U.S. Open criticizing crowd
favorite Andy Roddick, as well as for pulling out of matches for assorted
maladies.

Still, Djokovic would likely get a guarantee of around $1.5
million to $2 million annually in a deal, sources said. To put that figure into
context for K-Swiss, the California-based company at the end of 2008 had $1.9
million in total endorsement obligations stretched out over the next three
years, according to the company’s annual report.

Djokovic’s agent at CAA Sports, Allon Khakshouri, did not
reply for comment.

K-Swiss is perhaps best known for its endorsement with Anna
Kournikova, a deal that is unlikely to be extended, a well-placed source said,
because the company is now focused more on performance than lifestyle. That
deal, which expires in February, was signed in 2007, after Kournikova had
retired from competition.

Other players signed include Tommy Haas, Vera Zvonareva and
Mardy Fish. None of them, however, gives the company a mega-star.

Vervloet, a former tennis coach, grew up a mile from Nike’s
Oregon campus. K-Swiss hired him three years ago to build the company’s tennis
and running business. He said the company is also expanding into skateboarding
shoes, an area expected to launch in 2011, and that there may be another sport
the company will tap soon for endorsers, though he declined to provide details.
The company has a number of triathlete endorsers and sponsors the Ironman
events, as well.

The majority of publicly traded K-Swiss is controlled by
Steven Nichols, who holds 70 percent of the total voting power of the company.
Nichols, the company’s president and chairman, has signed off on the
endorsement spending, Vervloet said.